Jul. 4 – The new issue of China Briefing Magazine, titled Value-Added Tax Reform, is out now and will be temporarily available as a complimentary PDF download on the Asia Briefing Bookstore throughout the months of July and August.
As part of China’s tax reform under the 12th Five Year Plan (2011–2015), value-added tax will replace business tax. Shanghai has taken the lead in the value-added tax (VAT) reform, having instituted a Pilot Reform Program for the transportation sector and six modern service industries since January, and Beijing is next. Large-scale geographic expansion is on the way, with nine other cities and provinces having officially applied to participate in the Program so far.
VAT reform is a confusing transition for many and introduces a number of additional questions, such as exactly what types of input VAT are now deductible. Confusion about the new laws may also allow opportunistic companies to charge higher prices and blame the increase on the tax reform.
To add some clarity to the issue – and VAT in general – this issue of China Briefing takes a look at a number of VAT-related questions, including:
- How does VAT work in the current tax system?
- Does VAT increase or decrease the overall tax burden?
- What’s the legal framework of the VAT Reform Pilot Program?
- What problems do foreign companies often have with VAT?
Value-Added Tax Reform is out now and immediately available as a complimentary PDF download on the Asia Briefing Bookstore throughout the months of July and August.
Dezan Shira & Associates is a specialist foreign direct investment practice, providing corporate establishment, business advisory, tax advisory and compliance, accounting, payroll, due diligence and financial review services to multinationals investing in emerging Asia. Since its establishment in 1992, the firm has grown into one of Asia’s most versatile full-service consultancies with operational offices across China, Hong Kong, India, Singapore and Vietnam as well as liaison offices in Italy and the United States.
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